Physician Medical Risk Management and Insurance Planning Practices of Leading CERTIFIED MEDICAL PLANNERS®

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      Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™  Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™



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What is a Social Impact Bond?

New Financial Product – or Societal Economic Hammer

By Dr. David Edward Marcinko MBA CMP™

At a time when government finances are stretched there is growing interest in finding new ways to fund public services [healthcare, for example] which improve social outcomes [public health]. And, one new funding model currently being tested, for the past decade in the United Kingdom, is Social Impact Bonds (SIBs).


A SIB is a form of payment by results (PBR) in which funding is obtained from private investors to pay for interventions to improve social outcomes. If these interventions succeed in improving outcomes, they should result in savings to the Government and provide wider benefits to society. Of course, as part of a SIB, the Government agrees to pay a proportion of these savings back to the investors. If outcomes do not improve, investors do not receive a return on their investment.


Wall Street’s Securitization

Wall Street can securitize almost any asset for a commission, or to hold it for profit or loss. Remember David Bowie bonds?

“Securitization” is the process through which an issuer creates a financial instrument by combining other financial assets and then marketing different tiers of the repackaged instruments to investors. The process can encompass any type of financial asset and promotes liquidity in the marketplace.



SIBs may be an example of securitization. By combining small debt into one large pool, the issuer can divide the large pool into smaller pieces based on each individual bond’s inherent risk of default, and then sell those smaller pieces to investors. The process creates liquidity by enabling smaller investors to purchase shares in a larger asset pool. Individual retail buyers, like physician-investors and others, are able to purchase portions the bond. Without the securitization, retail investors might not be able to afford to buy into a large pool of bonds.

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This is the first time we’ve discussed SIBs on this ME-P. But, they should get much more attention from our CPA, investment advisor [IA] and financial advisory [FA] readers now that President Obama has announced his support for this British idea like getting private investors to pay for public services such as housing for the homeless, health care for vulnerable populations; or even education. It could work for anything that can save the Government money in the long run, but costs money up front, as long as we can measure it.



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ESG Investing: Not So Hot … Anymore?

By Staff Reporters

Environmental, Social, and Corporate Governance

Florida is pulling $2 billion from BlackRock in the largest divestment ever made as part of the growing vendetta against Environmental, Social, and Governance (ESG) investing practices. Florida Governor Ron DeSantis and other Republican leaders claim that by taking ESG standards into account when making investment decisions, the firm isn’t prioritizing the bottom line. But, for a few years, things were good. In 2020 and 2021, ESG funds outperformed the market by ~4.3%.

DEFINITION: According to Wikipedia, ESG (environmental, social, and corporate governance) data reflect the externalities (costs to others) an organization is generating with respect to the environment, to society and to corporate governance. ESG data can be used by investors to assess the material risk the organization is taking and by the organization itself as metrics for strategic and managerial purposes. Investors may also use ESG data beyond assessing material risks to the organization in their evaluation of enterprise value, specifically by designing models based on assumptions that the identification, assessment and management of sustainability-related risks and opportunities in respect to all organizational stakeholders leads to higher long-term risk-adjusted return. Organizational stakeholders include but not limited to customers, suppliers, employees, leadership, and the environment.


Since 2020, there has been accelerating interest in overlaying ESG data with the Sustainable Development Goals (SDGs), developed based on work by United Nations beginning in the 1980s.


The term ESG was popularly used first in a 2004 report titled “Who Cares Wins”, which was a joint initiative of financial institutions at the invitation of UN. In less than 20 years, the ESG movement has grown from a corporate social responsibility initiative launched by the United Nations into a global phenomenon representing more than US$30 trillion in assets under management. In the year 2019 alone, capital totaling US$17.67 billion flowed into ESG-linked products, an almost 525 percent increase from 2015, according to Morningstar, Inc.. Critics claim ESG linked-products have not had and are unlikely to have the intended impact of raising the cost of capital for polluting firms, and have accused the movement of greenwashing.


Now All Mad

DeSantis ran his most recent campaign on fighting the “woke ideology” he believes is infiltrating the state. As part of the fight, Florida passed a resolution in August that said ESG standards should be ignored when investing state funds.

And he’s not the only one:

  • Other Republican-controlled states, including Missouri and Louisiana, have moved almost $1.3 billion away from BlackRock for similar reasons.
  • Texas flagged BlackRock as a financial firm that boycotts the state’s energy industry (something BlackRock has denied).

Meanwhile, Democrats aren’t happy either…they criticize BlackRock and ESG investing in general for not going far enough (and for using lax standards that let oil giants onto lists of ESG investments).

Bottom line: According to the Morning Brew, BlackRock and Florida are now cursed to yell “How could you prioritize politics over returns?” back and forth for eternity, and the debate over ESG investing is far from over. Republicans are poised to take over the House—after a campaign season that BlackRock poured record cash into—so we’re likely to see more drama play out at the federal level soon.



Thank You




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